The State of China Atlas. Robert Benewick

The State of China Atlas

China’s exceptional rate of economic growth, which has, in turn, brought a significant increase in central government revenue through taxation. From 2006 to 2007, tax revenue rose by more than 30 percent. However, inflation also increased dramatically, mainly fueled by increases in the price of food.

see also page 110

ECONOMIC DEVELOPMENT

The entrepreneur, scion of the market-oriented economy, is fêted in popular self-help manuals and potted biographies in China’s bookshops. The re-organization and closures of state owned enterprises, the opening of China’s economy to foreign investment, and the large-scale privatization of housing has created opportunities for an “entrepreneurial class”. This group comprises both newly enriched entrepreneurs, and those who have used their business acumen and political connections to advantage in the reformed economy. Following Deng Xiaoping’s dictum “Get Rich First”, peasants moved out of grain production into specialist and luxury food production, or set up town and village enterprises. The area of land used for vegetable growing increased by 80 percent. Many of those who prospered became village leaders, chairing village enterprises management committees. The dictum “two classes, one stratum” no longer holds, as workers and peasant- farmers alike, but especially domestic migrant workers, are relegated to the bottom of the pile. Class divisions in China are stark. The urban rich are accumulating substantial wealth, while aspirational urban workers struggle to maintain access to costly services and housing. Meanwhile, the poor are caught in a cycle of deprivation. Their plight is exacerbated by the value of land, particularly for development and industrial farming. Increasing legal flexibility allows large enterprises to appropriate small plots, rendering their previous incumbents tenants, or landless. The State’s concept of “harmonious society” is designed to address the growing disparities amongst its people.

see also page 110

ENTREPRENEURS

There are at least 8 million new entrants a year into China’s labor market. While creating jobs is, and will remain, a daunting task, it is not just the number of entrants that is a concern, but also how to ensure that they possess the appropriate skills needed for China’s continued development. A popular saying is that there are three genders in China, male, female and those with foreign doctorates. There are two even more potent dividers: those with the potential and training to work in an advanced, mixed economy, and those who can only work in unskilled and low-paid jobs with little hope for advancement or long-term security. Wage levels across the nation are highest in the metropolitan centers on the eastern seaboard. There are anomalies in poorer regions such as Tibet, however, where inward migration of skilled labor and entrepreneurs is actively encouraged by State subsidies.

see also page 111

EMPLOYMENT

Agriculture provides a declining share of China’s GDP. While this decline is in line with trends in other industrializing countries, ensuring a continuing and adequate food supply for the population presents the Chinese government with a particularly daunting logistical challenge. Government investment has targeted agricultural modernization in an attempt to revive rural confidence and productivity. Animal husbandry (mainly factory farming) and production of corn for animal feed and crops vital to the food processing industries are booming, in large part due to the increased emphasis on meat and dairy produce in the Chinese diet. The amount of grain produced for human consumption was in decline, but is now climbing back towards its mid-1990s level. In 2007, as a result of the harmonization policy, a 2,600-year-old agricultural tax was abolished, along with a host of other taxes imposed on the rural population. The following year, the government discussed a new land-tenure policy designed to encourage smallholders to create larger and more productive farms through land-lease arrangements. Such a move would affect up to 800 million people still classified as farmer-peasants.

see also page 112

AGRICULTURE

China’s industrial output is expanding, with goods produced both for export and in the hope of building domestic demand. The highest growth in production is clustered around three key consumer goods: PCs, cell phones and cars, all three of which have a detrimental impact on the environment. The next fastest-growing commodity is cigarettes, the negative impact of which will be felt on the nation’s health and health services in the decades to come. China’s car production in 2007 was the third greatest in the world, in part to meet the demand for the passenger vehicles that are clogging China’s roads. Cell-phone manufacture includes production of global brands but also of home brands designed for local distribution. PC manufacturers have in some cases managed to globalize their brand names, with companies such as Lenovo now recognizable to users all over the world.

see also page 112

INDUSTRY

Over the last 20 years, the share of GDP contributed by the services sector has grown by 10 percent. Most of this growth would seem to be at the expense of agriculture, but the gap between industry

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